The Zipmex rescue deal was threatened after the investor reneged on an earlier promise to pay creditors in full.
Amid plans to save beleaguered cryptocurrency exchange Zipmex from bankruptcy, the investor reported reneged On the promised 100% payment. According to reports, the rescue investor in Zipmex is now seeking to pay just 10 to 20 cents on the dollar to the exchange’s creditors. This development proved shocking because the “unnamed” investor initially pledged to pay Zipmex’s debt in full.
Zipmex’s lawyers, Morgan Lewis Stamford, confirmed the position in a letter to the High Court of Singapore that read:
“We were instructed that in early April 2023, Subscriber Now verbally indicated that Subscriber Now was only willing to consider a compromise to creditors in the schemes that would result in a return to creditors of between 10 cents and 20 cents on their current dollar debt.”
Zipmex Rescue Investor is believed to be Ventures
Although Zipmex did not name the rescue investor in its letter, The Block deduced the identity as Thai VC Ventures. According to the blockchain and crypto news outlet, Ventures signed a $100 million deal with Zipmex late last year. In return, the venture capital firm acquired a 90% stake in Zipmex. The deal also called for Ventures to pay the Zipmex acquisition fee in installments as the digital asset exchange battled bankruptcy. However, despite the good start, Ventures defaulted on a fourth tranche payment of $1.25 million in March. This payment failure left Zipmex unable to pay certain employees and at risk of liquidation. To illustrate the dire situation last month, Zipmex co-founder Akalarp Yimwilai wrote to Zipmex Technology employees:
The investor is obliged to submit the monthly installment payments so that we can make the payroll every month. We haven’t received the installment payment yet despite many attempts; The investor remains unresponsive.”
Although Yimwilai expressed optimism that the payment due had arrived, the Zipmex co-founder also prepared for the worst-case scenario.
“We still hope that the investor will be slightly delayed in transferring the monthly payment, but at this critical stage, we have to prepare for all eventualities,” he said.
At present, an internal source confirmed that the batch had not arrived yet.
Zipmex bankruptcy
Last July, Zipmex ran into trouble when it suspended customer withdrawals due to exposure to struggling crypto companies Babel Finance and Celsius. The total estimated exposure was $53 million and forced Zipmex to file for bankruptcy that same month. Two weeks into August 2022, the central digital asset exchange also guaranteed more than three months of creditor protection. At the time, Zipmex revealed that it was “working to return the assets from Babel Finance.”
Since then, the company has secured a bailout and expanded its protection from potential creditor lawsuits. Zipmex’s final creditor protection window expires on April 23. Until then, the company has to solve its financial problems. However, in its letter to the Singapore Supreme Court, Zipmex plans to apply for an additional extension.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not in the depths of cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.